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Question - Stone Co. began operations in Year 3 and reported $225,000 in income before income taxes for the year. Stone's Year 3 tax depreciation exceeded its book depreciation by $25,000. Stone also had nondeductible book expenses of $10,000 related to permanent differences. Stone's tax rate for Year 3 was 40%, and the enacted rate for years after Year 3 is 35%. In its December 31, Year 3, balance sheet, what amount of deferred income tax liability should Stone report?
a) $8,750
b) $10,000
c) $12,250
d) $14,000
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